ARRA Implementation

1. ARRA Implementation What Worked, What Didn’t, & What’s Next Colorado State Controller David McDermott, CPA

2. What Worked Overall a phenomenal accomplishment Nationwide implementation Never before attempted Seven months from signing to reporting No dollars at the state level Wide range of technical expertise Significant language and knowledge barriers Delivered on time without much acrimony

3. What Worked People involved Competent, committed, and altruistic Willingness to suppress egos (and tempers) Open and ongoing communication Change to a batch submission process Frequently Asked Questions format for guidance promulgation Allowing recipient input to questions and answer content

4. What Worked National organizations collectively interacting with OMB, RATB, and GAO Friday morning calls – NGA, NASACT, NASBO, NASCIO, etc. NASACT/DCA/OMB on the Supplemental SWCAP OMB and RATB willingness to work with Federal agencies on a “single voice”

5. What Worked Application Support at RATB Responsive Well informed Creative Consistent Help desk Managed high volume effectively Generally pleasant and helpful Appropriately raised issues for Federal management consideration

6. What Worked (for Colorado) Policies on: Aligning the definition of internal transactions with GASB 14 & financial accounting/reporting Accounting systems flags for reportable vs. nonreportable and pass through vs. external spending Prohibition against delegating reporting to subrecipients or being delegated reporting responsibility by another prime recipient Centralized reporting

7. What Didn’t Work Late changes to basic design elements: Multiple versions and significant changes to the data model Database structure, and data base hierarchy never clearly defined Multiple CFDA numbers per grant award ID DUNNS number and Award ID as a key data elements one validated but not the other, not communicated until changes to Award ID’s became late submissions

8. What Didn’t Work Requiring recipients to provide information they didn’t know: Treasury Account Symbols used exclusively at the federal level and unfamiliar to most recipients Distinction between funding and awarding agency should be known by the Federal government, but may not be apparent to recipient

9. What Didn’t Work The Tower of Babel: Undefined terminology Use of terms with audience specific meanings Agency Obligation – spent when obligated vs encumbered Cryptic file submission error codes

10. What Didn’t Work Multiple Masters: Inconsistent directives from OMB and Federal agencies Reporting path Direct to FederalReporting.gov vs. direct to Federal agency State =>FHWA=>State=>FederalReporting.gov Reporting level Award ID Project Jobs count Specific identification formula vs. program specific methodologies

11. What Didn’t Work Lack of time for training: Federal level: Communicating when OMB requirements would rule and when Federal agency would have discretion Standardizing and streamlining the review process State level: Difficulty in identifying the right people – accountants, purchasing, grants/program staff, and POC Changing requirements - increases confusion if training cannot be ongoing Resource limitations

12. What Didn’t Work Oversight cost recovery: Basic flaw in the Act S-SWCAP remedy less than satisfying Unnecessarily time consuming and resource intensive for both DCA and recipients Highly dependent on estimates where no valid estimation methodology exists No workable provision for recovery from grants already expended or those prohibiting oversight costs Requires ongoing adjustment to actual

13. What Didn’t Work Initial design of FederalReporting.gov and related access controls: Design focused on individual submissions Ignored the potential for high volume and state’s need for centralized accumulation of data and reporting Access Controls - Potential for disabling state’s centralized recipient reporting Remedy drove batch submission process – an impressive comeback late in the game

14. What Didn’t Work Jobs count Objective conceptually flawed (not the implementation) OMB calculation directives worked only for jobs specifically identifiable Job retention – the magic “what if” scenario Indefinable in year one – FTE cuts are not budgeted by position - management discretion allowed Worse in years two and three – budgets don’t project FTE cuts this far out

15. What Didn’t Work Federal agency review process System processes and controls not described or communicated Training by trial and error Both sides overloaded by the volume Programmed exception reporting such as jobs count “outside of parameters” No appeals process to address Federal agencies requiring data change requests that states believed to be inappropriate

16. What’s Next Recovery from the Recovery Many states made ARRA a priority – they’re still catching up on their “normal” job States have requested a change hiatus at least until April, 2010 Recipients need to evaluate internal systems and redesign weaknesses Time needed to automate systems where ad hoc manual processes were used

17. What’s Next States may need to reconsider centralized vs. decentralized reporting and the benefits of a hybrid approach Central office overload Time commitment cannot be duplicated at fiscal year end All parties should work on “many masters” and “single voice” problem Solidify a consistent definition of internal versus external transactions considering the effect on “subrecipient” reporting

18. What’s New NGA, NASACT, NASBO recommend no changes for January, except better jobs guidance. OMB actions: Step by step jobs guidance Jobs spreadsheet calculator Fed agency ARRA guidance peer review process New guidance due the week of December 4 (by the 18th?) No plan to centralize guidance in one site Memo to Fed grantors on chronic nonreporters Focus turning to accountability and improper payments

19. What’s New RATB actions: Enhancements to FR.gov (as time permits) No new fields New internal audit or data edit checks: Hard edit on Congressional districts validity Soft edit on Zip +4 for Congressional district Soft edit on jobs vs. dollars alignment Infrastructure soft edit on Expenditures > Award Reject Fed funding/awarding agencies that are not grantors

20. What’s New RATB actions: Other changes: Quality Assurance continues after the 30th Working w/ OMB on W2 type grant notification for TAS, Funding Agcy, Granting Agency, etc. Version control on FR.gov database, copy function from previous to current version No decision yet on extended submission period Concern about locals reporting capacity and knowledge